XLE -- a technical view.
Those who wish to go/maintain a long position here on XLE would do well to take care here. On the daily chart XLE topped in early March and has established a downtrend. From a high of 45.14 on 3/9 (with a 4 day, go-nowhere, flat topping pattern), it has sold off and made 4 lower lows and 3 lower highs on the daily chart.
On the weekly the uptrend is theoretically intact, but negative volume is dominating the 6 week trend (that is volume is heavier on the down weeks. As with other energy names, if this is indeed a selloff to a level of support (37 catches my eye as one natural area, as does 38), it would look like this.
On the hourly this rally looks to be fading as well.
In order for XLE to re-establish its uptrend I think it should close above $44 on a daily bar with strong (over 28 million) shares traded. At that point cautious long positions with reasonably tight stops should be used to follow the breakout, if it continues to break out.
If a close above $44 doesn't happen in the next 2-3 sessions, I'd be looking for XLE to roll over and take out the previous low, that is, trade down to $39 or lower, over a somewhat longer timeframe (7-8 sessions). If it does that, then it could be expected to spend some time in the $38 to $41.50 range before testing $38 and then $37.
Kb |
